Short Squeeze Seen For American Tower
The American Tower 9.375% notes of '09 (Caa1/B-) rose four points to a bid of 86. One trader claims there was a short squeeze on the bonds, as they could not be borrowed despite the fact that it is a liquid $1 billion issue.
Lyondell Stable Despite Ratings Pressure
Lyondell Chemical Company saw its 9.625% notes of '07 (Ba3/BB) unchanged last week at 97 after Standard & Poor's put the company on Creditwatch with negative implications due to its reliance on crude oil from Venezuela. A buy-side analyst says that given the overall bullish tone of the market, the lack of a price move should be seen as a negative reception. The analyst says a worsening political situation in Venezuela could be a serious problem for Lyondell, noting that the company is four weeks behind schedule in the release of information regarding its capital expenditure program.
Vegas Gaming Softens On Weaker Numbers
Bonds of Las Vegas gaming companies were off slightly after benchmark issuers MGM Mirage and Mandalay Resort Group cut earnings expectations for the fourth quarter. The MGM 9.75% notes of '07 (Ba2/BB+) dropped from 110.25 to a 109 bid, while the Mandalay 10.25% notes of '07 (Ba3/BB-) fell a point to 109.5.
Jacques Cornet, head of high-yield research at CIBC Capital Markets says the weaker numbers should not be a concern to bondholders, as credit fundamentals in the sector remain strong.